Baroness Amos: My Lords, during the Easter Recess, we lost one of the most remarkable Members of this House, Lord Callaghan of Cardiff. I rise to pay tribute to him and I am deeply proud to do so. As well as being a former Prime Minister, he held the distinction of having held all four of the great offices of state; something that noble Lords will agree is unlikely to be repeated.
	It is difficult to improve on the tributes paid to him last week by Prime Ministers past and present. Sir Edward Heath said:
	"We have lost a major figure from our political landscape".
	The noble Baroness, Lady Thatcher, described him as "a formidable opponent" and my noble friend the Prime Minister spoke of,
	"a giant of the Labour movement ... he worked tirelessly to put into action the values of social justice, solidarity and opportunity for all which brought him into politics and the Labour Party".
	However, Lord Callaghan was more than a political heavyweight. He was also a loving father, grandfather and great-grandfather, a beloved husband and a cherished friend. As noble Lords will know, Lord Callaghan's wife of 67 years, Audrey, died just a few days before he did. We all remember his selfless devotion to her. Our thoughts are of course with the family at this difficult time and I know that I speak for the whole House when I say that we are thinking in particular of their daughter, my noble friend Lady Jay of Paddington.
	Leonard James Callaghan was born in Portsmouth in 1912. The son of a Royal Naval Chief Petty Officer, his father died when James was just nine. He was educated at Portsmouth Northern Grammar School and in 1929 he joined the Civil Service as a clerk in an Inland Revenue office in Maidstone. It was around this time that he met Audrey and became a trade unionist, joining the Labour Party in 1931. Having become a full-time union official with the Inland Revenue Staff Federation, he volunteered with the Royal Navy during the Second World War, serving with the East Indies fleet and later being commissioned as a lieutenant in the Royal Naval Volunteer Reserve.
	After the war, Lord Callaghan's political career stepped up a pace. His 42-year association with the parliamentary seat of South Cardiff began when he was elected to Parliament in Labour's landslide election victory in 1945. By 1947, he had been promoted to the Front Bench as Parliamentary Secretary, Ministry of Transport. He subsequently served the Attlee government as Parliamentary and Financial Secretary to the Admiralty and although Labour returned to opposition in 1951, his career continued to flourish as a Front Bench spokesperson.
	When Harold Wilson's government was formed in 1964 he was named Chancellor of the Exchequer. In that capacity, he introduced corporation and capital gains taxes, but he left the Exchequer in 1967 when he was forced to devalue the pound, moving to become Home Secretary in a straight swap with the late Lord Jenkins.
	He was a well regarded Home Secretary, winning admirers on all sides. With the situation in Northern Ireland taking up much of his time, he was described by my noble friend Lord Healey as having dealt with the issue with
	"incomparable skill and understanding, both on the spot and in Westminster".
	During his career at the Home Office he also introduced the Race Relations Act 1965, but defeat for Labour in the 1970 election meant another period in opposition.
	In Harold Wilson's second government in 1974, Lord Callaghan became Foreign Secretary, working on such issues as world poverty and Britain's relationship with the rest of Europe—topics very familiar to this House today.
	In 1975, he played a key role in the referendum on membership of the European Community and when Harold Wilson resigned in 1976, he was the favourite to succeed him. So it was, on 5 April, 1976 that James Callaghan became Prime Minister, apparently exclaiming at the time:
	"Prime Minister, and I never went to university!".
	His period at No. 10 was a challenging time. With the economy in trouble, his government had to secure the passage of unpopular cuts in government spending. His political skills were such that he was able to persuade a majority of his Cabinet to support his Chancellor, my noble friend Lord Healey, who later praised the,
	"consummate skill with which he handled the Cabinet".
	Lord Callaghan was popular with the people. His candid straight speaking appealed to them, and he oversaw a revival in Labour's fortunes. As we know, it was not enough and in March 1979 his government were brought down by a vote of no confidence. Lord Callaghan remained Labour leader in opposition for 18 months and in 1983 became Father of the House. He retired from the House of Commons in 1987, was appointed a Knight of the Garter in April and created a life Peer.
	I know that we will all agree that this snapshot of Lord Callaghan's life cannot fully reflect a truly remarkable life. He was passionate about his politics, not least about the right to a decent education, but he was also a tough, practical, calm leader, vastly experienced and candid. With Lord Callaghan's passing this House has lost a great man—a man who served his country with distinction but who was also a family man. I do not think that we shall see his like again.

Lord Strathclyde: My Lords, it is a privilege to follow the noble Baroness the Leader of the House in her just tribute to the late Lord Callaghan of Cardiff. People will remember Lord Callaghan above all as a decent, patriotic commonsensical man, ready to tell uncomfortable truths if needed and to face the consequences if he believed the cause was right.
	The public instinctively liked and respected the man they knew as Jim. There will millions in the Wales he loved and right across Britain who heard of his death with great sadness. In the age of modern politics, focus groups, image and spin, his straightforward qualities seem to recall another era. Lord Callaghan was in Parliament for well nigh 60 years, 42 as a Member of Parliament for Cardiff South. As the noble Baroness the Leader of the House said, he was the only person ever to hold the four great Offices of State: Home Secretary, Foreign Secretary, Chancellor of the Exchequer and Prime Minister. That is a record unlikely ever to be equalled.
	In all those offices he faced enormous challenges—in the 1960s a struggle for the pound that ended in devaluation against a background of relative economic decline, and in the 1970s renegotiation of our relationship with the EU. But in good times and bad he conducted himself with great political skill and integrity, never more perhaps than when he took a difficult decision to commit troops to Northern Ireland, or when, far ahead of most in the Labour movement, he saw that Britain could not spend its way out of problems and that wages could not run ahead of increases in national prosperity. That realisation and his typically blunt statement of it framed his term as Prime Minister.
	When he eventually fell from government it was a sad end to a period in which he served this country with great distinction as Prime Minister, not least because he realised the limitations on that office and did not try to back-seat drive every part of government.
	Lord Callaghan did not join us in this House until 1987, but we miss him and his wise interventions from his usual place in this House. Many on all sides of the House had good reason to be grateful for his kindness and the voice of his unparalleled experience, not least on the Copyright, Designs and Patents Act in the late 1980s when he championed and was successful in getting the government to agree to an amendment to extend the copyright on Peter Pan to the benefit of the Great Ormond Street Children's Hospital.
	Lord Callaghan knew great poverty in childhood and great distinction in old age but it did not change him. He held by lifelong principles. He dealt as he found, meant what he said and said what he meant. He loved this country he served so faithfully in war and peace—the last Prime Minister, we must all hope, ever to serve in wartime. He loved the countryside, his beloved farm in Sussex, his family and the values that go with that, living to relish grandchildren and great grandchildren and supported by all his family, not least the noble Baroness, Lady Jay of Paddington, to whom the whole House will extend the sincerest sympathy.
	That sympathy is the deeper because of the recent loss also of Lady Callaghan, to whom I add my own tribute. Together they shared some 67 years of married life and were separated in death by just 11 days. Lady Callaghan, too, had a deep well of goodness, decency, humanity and sincerity. In these qualities Lord and Lady Callaghan were two sides of the same coin. The metal of that coin was gold. This House and this country will long remember them.

Lord McNally: My Lords, the noble Baroness the Lord President of the Council and the noble Lord the Leader of the Opposition have very eloquently expressed memories of Lord Callaghan as a "statesman", as the House magazine heads him today. Looking around this House, I am well aware that we also mourn him today as a colleague and a friend.
	I had the honour of working for Lord Callaghan as his political secretary for nine years. I never liked the term "political adviser"; I thought it was absurd, rather like saying that you were dancing adviser to Nijinsky, or golfing adviser to Jack Nicklaus. I prefer "political secretary". They were nine wonderful years of my life. I always remember that he had a massive fund of Hugh Dalton stories. I remember saying to him, "You realise that in 30 years' time I will have a whole fund of Jim Callaghan stories". "Oh no, Dalton was a giant", he said. But of course, as the Prime Minister so rightly said, so was Jim Callaghan.
	Perhaps I can give a flavour not only of what an honour it was to work for him, but what good fun it was. In the early 1970s, we went together to Vietnam to meet President Thieu, then president of South Vietnam and something of a controversial figure both in his own country and back here in Britain. After the meeting, we had a press conference and Mr Callaghan, as he then was, was asked by the South Vietnamese press what he thought of President Thieu. He said, "He would make an excellent member of the national executive of the Labour Party". That satisfied the South Vietnamese press, which did not probe him further about his opinion of the national executive of the Labour Party.
	I also remember going with him during the renegotiations on Europe. The meeting started some time in the morning, and as those European meetings tend to do, it went long into the evening. At about 11 p.m. Mr Callaghan signalled that he wished to speak, and he was called by the chairman. He opened with an absolute eulogy of his Minister of State, Mr Hattersley—now the noble Lord, Lord Hattersley. He praised Mr Hattersley's eloquence, his grasp of his brief, his shrewdness, his toughness and his ability. Then he concluded, "And that is why I have every confidence that I can now go to bed and leave it to him". I could go on; there are hundreds of stories, I assure you.
	I was also struck by the fact that, among those from not only the Labour side but all sides of the House, he was part of that generation who had been scarred by the 1930s and then by the horrors of the Second World War, and who came back to win the peace, saying, "Never again". Those experiences very much formed his political life. He was a politician. Sometimes people find that "politician" is a rather pejorative term. He was a politician in every sense; he knew how to take knocks and to give them. He did not find smoke-filled rooms overly oppressive; he knew how to work the machine and he saw nothing wrong with that because for him politics was for a purpose. In trying to pick out things in that career as I knew it, the IMF negotiations were referred to. When the papers are published it will be a case study of what good Cabinet government should be. He immensely strengthened Cabinet government and its process during his time in office.
	My final comment about him also involves Lord Whitelaw. During the first election of 1974, I was travelling the country and the marginals with Jim Callaghan in a rather large limousine that the Co-op funeral service had provided. We stopped somewhere in the East Midlands for a cup of tea at a hotel, and about two or three minutes later in came Willy Whitelaw with a protection officer and someone else—we all travelled with smaller entourages in those days. Jim got up, walked across to him, came back to me and said, "I hope you don't mind, but Willy and I are going to have a pot of tea together". I have often thought when people think of the rivalry of politics that in the midst of a rather bitter and divisive election those two great statesmen were sat in the corner of an English hotel having a pot of tea and talking together before they went off to their respective campaigns.
	In a way, Willy also ends this tribute. I have many memories of him, one of which dates from just after I came into the House in 1976 and the Conservatives were in trouble over the Broadcasting Act. Lord Whitelaw did not come often to the House in those days but he did attend for a crucial debate and vote. He made an impassioned speech from those Benches up there in support of the government position. He sat down to general approval, and Lord Callaghan stood up and pursed his lips. He looked round for quite some time, and said, "Well, we always know when they're in trouble, don't we?". He had the House with him. Reading all the tributes, strangely enough it was his old nemesis, Mrs Thatcher, who got it right. He was a patriot and he was a parliamentarian. He is somebody I will miss very much.

Lord Renton: My Lords, although so much has already been said about Lord Callaghan, I wonder whether I might add a few words, because he and I were elected to the other House in 1945. We were elected to different parties but—I cannot remember how it happened—we became friends at an early stage. I thought that he was a very likeable man, and he turned out to be very open-minded. I was a political opponent, but he always wanted to know what views one had and one's friends had. Over the years, his mind broadened by taking in as much information as he could from not only his parliamentary friends, but his political opponents.
	One thing brought us rather close together when we had been in Parliament only a few years—our common interest in transport. I held a humble position as secretary to the Conservative transport committee when he became Parliamentary Secretary at the Ministry of Transport. Far from that turning us into controversial political opponents, it brought us closer together. Privately he would very often ask my opinion about one thing or another to do with transport.
	Over many years, I grew in greater admiration for him, because the great variety of responsibilities placed on him in his various parliamentary offices meant that he had to open his mind still further and adapt it as was required. He never failed in any of the important posts for which he was given responsibility. He was greatly admired right across the House of Commons at that time and, I have no doubt, in your Lordships' House.
	I take the liberty of paying my tribute because, when he departed, he and I were the longest-serving Members of both Houses. We had both been here for nearly 60 years. Mind you, two hereditary Peers have served in Parliament even longer. One is my noble friend Lord Jellicoe, who I am glad to say has his 87th birthday today—nice young fellow—and then there is the noble Lord, Lord Carrington.
	For those of us who knew Jim Callaghan from the start of his parliamentary life, it has been a great joy to have his daughter here. One does not always agree with her, but one is glad that she is here and admires her efforts.
	In my long life, I have found that Jim Callaghan was not only one of the most interesting and friendly men that I have known, but one of those conscientious men who wanted to obtain other people's opinions to a very great extent. I was delighted when we became close enough friends for him and Lady Callaghan to attend two charitable concerts that I had organised.
	In Parliament, over the many years that many of us have been here, there has been a lot of talent. People have varied enormously. But of all those that we have known, few have reached the distinctions of one kind or another that he did, and fulfilled them so much in the national interest.

Lord Morgan: My Lords, I should have said, biography. It occupied some eight years of my life, and it was the most interesting thing that I have ever done. It was a biography, not an autobiography. He was a strong man to talk to and a tough man. If someone has written their autobiography, which is, no doubt, what I had in my mind, you have to jolt or unsettle them in some way and that could be quite exciting. I recall immigration and devolution as two topics that produced a certain amount of excitement.
	Lord Callaghan was also very human and very aware of his own experiences, which gave him a great depth of sympathy with the sufferings of others, including, perhaps I may say, myself and my children when I was writing the book. He was very aware of someone who had lost his parents at a young age.
	He was a complex man with a great range of interests and experiences—one of them being rugby football. He played in the second row for Streatham. He was proud of that, and I am happy to say that, when he talked about rugby football and spoke about "we", he meant the Welsh—not the English—rugby team. He was a man with roots. He was rooted in Portsmouth. He was rooted in noncomformity, the Navy, the trade unions, the Labour Party and in this country. He was interested in British history, and he liked talking about it—in particular, the history of the Navy. He was interested in the fact that one of my antecedents fought at Trafalgar, which is a matter of some current concern.
	He was a man whose ideas could evolve and grow with events. That was true of his views on Europe, on Northern Ireland and many other topics. In many ways, he was a conservative and cautious man, but one who could also take extraordinary and dramatic leaps in executive action. So I think of him as being a big man. The bigger the person that I spoke to, the bigger the respect that they had for Lord Callaghan.
	I discovered a quote from Robert Blatchford, a famous socialist editor, about William Morris. It states:
	"Strike at him where you would, he rang true".
	Jim Callaghan always rang true, and I mourn his memory.

Baroness Jay of Paddington: My Lords, this has been a very proud afternoon for me, and I am profoundly grateful to your Lordships for the warm tributes and wonderful memories that have been expressed from every part of the House. Noble Lords have rightly reflected the extraordinarily full and, indeed, fulfilled life that my parents shared and enjoyed over such a long period.
	As you can imagine, over the past week, all of my family have received some extraordinary letters from all over the country and from all over the world. They range from letters and greetings from international statesmen to the Ukrainian parents of a young student who studied engineering at Swansea University—a "child of Chernobyl", as he was called—whom my father quietly supported there. As my noble friend Lord Carter reminded me, I must not forget the condolences from the organisers of the Sussex County Ploughing Championships, because, as the noble Lord rightly reminded me, my father's greatest prize among many was often the fact that he won the local wheat growing championship.
	Of course, it was in this Chamber and in another place that his political life was centred, as noble Lords have recalled. For 60 years the Palace of Westminster was a second home. So, it is as a parliamentarian that he would have particularly valued and been pleased to have heard the wonderful things that you have said. As noble Lords know and have referred to, it was concern for my mother that kept him from his familiar place on this Bench over the past few years of this Parliament. Nevertheless, you were never far from his thoughts. He read the Government whip every week, studied Hansard assiduously and often cross-questioned me about the individual speakers. It would be fair to say that, as time went on, his judgments of performance became slightly more mellow.
	He was immensely touched when, last February, the House noted that he had become the longest living former Prime Minister. His interest in international affairs, especially in Africa, has been referred to and was always active and involved. In the very last batch of letters that he and I chatted about on the day before he died was a report from the parliamentary Zambia Society Trust, which had sent to him a newsletter recalling a visit that he had made to the Central African Federation in 1957 and about which he had written to the trust. My noble friend Lady Amos will be pleased to hear that even in 1957 he was urging the improved education of women in Zambia.
	As many noble Lords will know, my father never lived in the past. In the last few weeks, he was already talking about how he would come on the opening day of the next Parliament to take the Oath. He was looking forward to a good crop of raspberries in his Sussex garden in July.
	Tomorrow, as noble Lords have said, will be 5 April. It may be the beginning of a new general election campaign. It will mark the 29th anniversary of the day that he became Prime Minister. I hope that tomorrow and in the future we will all remember one of his most often quoted remarks:
	"You may never reach the promised land, but you can certainly march towards it".
	My Lords, thank you very much.

Lord Ezra: My Lords, in view of the fact that CO2 levels are rising in this country and abroad, despite all efforts, is it not of urgent concern that various options that are being kept open to deal with those levels should now be closed? That applies not only to the nuclear option but to clean coal technology, a proven technology with which we should go ahead. If we carry on as we are, we may lose the battle against carbon dioxide emissions.

Lord Sainsbury of Turville: My Lords, the noble Lord is right to say that we should keep open the option of clean coal technology; we are doing so. In energy policy, it is essential to keep all the options open. It is disappointing that we saw CO2 emissions up by 2.2 per cent between 2002 and 2003. That was caused by an increased use of coal in the production of electricity and a fall in electricity imports from the continent. We recognise that we need to do more to meet our challenging domestic goals of getting a 20 per cent reduction of CO2 emissions by 2010. The current review of the climate change programme will provide an opportunity to examine the scope for further emission reductions.

Lord Sainsbury of Turville: My Lords, we need to have an agreed best solution to this problem. Once we have made that decision and gained a consensus on it, we should go forward on that basis. It is not a case for trial and error.

Lord Monson: My Lords, I thank the noble Lord for that rather predictable reply. Is he aware that it is not only those who celebrate Easter in church who would like the start of Summer Time to revert to the third Sunday in March, but everyone who looks forward to lighter evenings after the gloom of winter?
	Is he further aware that the 1972 Summer Time Act, which fixed the start date at the third Sunday in March, was not opposed in any way by the then Labour Opposition, nor by the Liberal Party, because it was clearly highly popular with the British electorate? A subsequent European directive forced the start date to be postponed by an average of 10 days.
	Would the noble Lord agree that if in July this year the British Government, whoever it may be headed by, were to succeed in getting the directive amended, they would earn the gratitude not only of the British people but of most of those on the Continent as well?

Baroness Gardner of Parkes: My Lords, does not the present date accord not only with the European Union but with many other countries such as Australia and Africa? As most countries of the world change times on the last Sunday in March, would not things be thrown out if the European Union changed? The EU is not in the same timeframe as us—there is one hour's difference—but the problem goes wider than Britain to the rest of the world.

Lord Monson: My Lords, of course I agree with the Minister that it is sensible, albeit not essential, for different countries to harmonise the start and finish dates of summer time. But would not the Government at least consider taking soundings among the people of Europe, both inside and outside the Union, to see whether they would welcome a slightly earlier date for the start of summer time?

Baroness Gardner of Parkes: My Lords, could the Minister explain his first Answer to me? He said that the figures were not available but, as I understand it, each one of the people that we are discussing, whether they come as a care assistant or adaptation nurse, must have a work permit. Is he unable to tell me how many are Chinese because the figures are kept by another department? Are the figures unavailable to his department or are they not kept at all?

Lord Davies of Oldham: My Lords, I am grateful for this short and informed debate, which builds on the excellent debate we had in Committee. I am not in such a benevolent mood that I can accept the amendment. However, I hope that I am able to express how the Government envisage the development of strategy in such a form as to reassure noble Lords opposite who have pursued these issues with some force and real consideration both in Committee and again today. One matter on which I can assure the noble Viscount, Lord Astor, is that I shall be a lot closer to him than was his own Back-Bencher, the noble Lord, Lord Peyton, on the issue of strategy and the role that a Secretary of State might play.
	I also note that the noble Viscount indicated that there will be a new Secretary of State after the election. He is obviously closer to the Prime Minister than I am because that knowledge has not yet been vouchsafed to me. But we shall see in the fullness of time; and the fullness of time is, after all, only a matter of weeks—perhaps. We may therefore not have to detain ourselves too long. Everything that I say about the general election today is purely conditional, as noble Lords across the House will recognise.
	I am not able to accept the amendment, not because I do not appreciate the importance of the argument about a strategy for the railways, but for the following reasons. First, the first part of the amendment imposes a duty on the Secretary of State to promote the use of the network and to secure its development. That is unnecessary. It is stated in the amendment but is already in the Bill.
	Section 4 of the 1993 Act, as amended by Clause 3, clearly envisages that to be the duty of the Secretary of State. The duty applies in relation to functions transferred or assigned to him by Sections 6 to 22 of the 1993 Act and by Part 4 of the Bill, other than relating to bus substitution in Clause 39. That includes his role in network modifications, licences, access agreements, and access charges reviews. It is important to note that that duty sits alongside a number of others specified in Section 4 of the 1993 Act.
	One of those duties is to contribute to the development of an integrated system of transport. I noticed that the noble Viscount, Lord Astor, blushed marginally when referring to integrated transport—a fleeting but well merited blush, given the record that we can all recall over almost two decades of his party being in power and responsible for transport. That duty applies to the Secretary of State. We must remember that the Secretary of State is responsible for all modes of transport. It is his job to ensure that people have a choice of modes, that the various modes operate efficiently together and that growing transport demand is met sustainably. The duty that we have provided in the Bill squares with that.
	I put it to the House that the duty in the amendment adds nothing material to what is in the Bill already. By creating a duty independent of the other Section 4 duties, the amendment fails to allow for the fact that the Secretary of State's role goes much wider than rail. Of course he has strategic obligations. How could he effectively fulfil his transport without having a strategy?
	The noble Viscount, Lord Astor, said that the Government have a walking strategy. He said that not in disparaging terms but as an aside. He emphasised that the Government have an aviation strategy. Indeed we have; that is overdue in this country, as most noble Lords will recognise. Is that in an aviation Bill? Of course not. The aviation strategy was produced in a White Paper. It is a strategy for many years ahead, as it is bound to be when it concerns the development of airports, which require huge investment and have enormous significance for both users of their facilities and those who live nearby. That obligation is not contained in legislation. The Secretary of State cannot do his job of providing for the requirements of the air-travelling public unless he develops a strategy.
	I turn to the duty to formulate strategies. I recognise that this is not in itself a killer argument, but the provision is unnecessary. The key role responsible for transport policy must be strategic. The Secretary of State devises, publishes, explains and promotes what he wants delivered. By its nature, that is a strategic role. Why did the Strategic Rail Authority have a duty to develop strategy? Because it was not the Secretary of State and because unless its duties were enshrined in statute, it could not have followed a strategic role.
	In abolishing the Strategic Rail Authority and developing the Secretary of State's role, we do not need to pick up those powers of the Strategic Rail Authority and apply them in legislation to the Secretary of State, because the Secretary of State is under an obligation to produce a strategy. It would be inconceivable to those in either this House or the other place that he could pursue the objective of meeting the demands of the travelling public unless he had due regard to such points.
	To underline that point, last year's White Paper on the future of rail stated explicitly that the Secretary of State intended to take direct charge of rail strategy. Indeed, the chapter entitled, "The role of government", includes a section headed, "Setting the strategy". There is no need for that duty on the Secretary of State.
	In presenting those arguments, I cannot, of course do anything about the dissenting voice of the noble Lord, Lord Peyton. We regret that we met in such inhospitable circumstances in the Moses Room and that we did not have the benefit of his contribution on the Bill. I cannot reach him on the question of strategy because, as a former Secretary of State for Transport, he disavows the whole notion that any Secretary of State could conceivably have a strategy. I understand that from the experience of almost two decades of the previous administration. We live in changed times when the majority of the public, and certainly the noble Lord, Lord Bradshaw, speaking on behalf of his party, has a rather different view of the virtues of strategy.
	The second problem with the amendment is that it appears to set out a series of topics on which the Secretary of State would be obliged to formulate strategies. That problem with the concept of separate strategies for separate aspects of the railway is that it risks a fragmented approach. Yet the burden of remarks from all sides of the House when we discussed strategy was the necessity for a joined-up, holistic approach that has regard to all aspects of infrastructure and operation. There is an important distinction between having a strategy for the railway and having a series of strategies for parts of the railway, which is what is envisaged by the amendment.
	That links into my third and most important point, which is that the amendment fails to reflect the future approach to rail strategy provided by the Bill. The Bill provides for the Secretary of State to give clear strategic direction at the most appropriate time in the run-up to an access charges review. As noble Lords will be aware, Schedule 4 sets out a procedure in which the Secretary of State will notify the Office of Rail Regulation of what he wants the industry to achieve and the funding that he is able to make available during the review period to secure the outcomes that he wants. They may need to be some iteration to match the statement of what is deliverable with what the ORR thinks can be delivered with the money available, but that is provided for.
	The notice from the Secretary of State to the Office of Rail Regulation will be known as a high-level output specification and it will be the key statement on his strategy for the railway during the forthcoming period. A comprehensive statement is bound to cover most, if not all, of the topics set out in the amendment, but in a coherent and connected manner. It is vital that we do not set the Secretary of State tasks that risk cutting across the strategic approach to specify outputs. The first statement of that kind is likely to be produced at the end of 2006.
	When we debated that matter in Committee, I accepted, as I do today, that the high-level output specification might not be quite enough on its own. It will meet the requirements of the Office of Rail Regulation, because it will consider the whole period to be covered by the access charges review, which will normally be five years. The argument was put with great eloquence in Committee that that will be a relatively short period for some aspects of planning for the industry. The Government recognise that there is a strong case for setting the specification in a longer-term context.
	There is also a case for a document that explains and interprets the formal specification in a way that can be readily understood by a wider audience. That could be of value to local authorities and others—my noble friend Lord Berkeley again emphasised the role of freight and its interest in the issue—who need to think ahead about transport provision.
	Given those considerations, I gave an undertaking in Committee that I am happy to re-emphasise today. When the high-level output statement is set out, the Government will also explain to everyone—those in the industry, in Parliament and the wider public—what are the implications of the specification and what is the Government's long-term strategy for the rail industry into which the specification process fits. Such an explanation will be of use and interest to many parties. The Government's key requirement is that it should be closely and clearly related to the high-level output specification and should not run any risk of cutting across that document.
	Producing the output specification and the further material that I have just promised is, I contend, the right way for a government to set out their strategy. The output specification is a linchpin of our reforms because it will bring together specification and cost control more effectively than ever before. Although we understand the thinking behind the amendment and have great sympathy with much of that thinking, the fundamental reason why we cannot agree to it is that it does not make the link to the specification that we regard as crucial.
	I repeat my promise that there will be a strategy for the railway in the same way that we have a strategy for aviation, which itself did not require an obligation upon the Minister in legislation. I can promise that it will look beyond the horizons of the access charges review. I believe I can promise that it will deliver what noble Lords in all parts of the House seek to achieve through the amendment.
	I cannot agree to the amendment, despite the pleas of the noble Lord, Lord Bradshaw. The noble Viscount, Lord Astor, has also presented the issues with some persuasion. The noble Lord, Lord Bradshaw, indicated that he would be disappointed if I could not agree to the entire amendment. I accept the thinking behind the amendment; I know how persuasively he has argued that in Committee and today, and I recognise the strength of his views. I cannot agree to the amendment, but I can deliver the substance of what noble Lords on both Front Benches seek. I hope that, with that assurance, the noble Viscount, Lord Astor, will be able to withdraw his amendment.

Lord Davies of Oldham: My Lords, I commend the noble Lord, Lord Bradshaw, on his eloquence in moving the amendment and the noble Viscount, Lord Astor, on the brevity and force of his support. I want to repeat what I said in Committee that of course the Government recognise the importance of the rail freight industry in this country and I agree with the noble Lord, Lord Bradshaw, that there is increasing interest in freight against the background of considering how to tackle our congested road network and reduce the amount of goods being delivered by road transport. That point is well taken. I want to reassure noble Lords that the Government take very seriously rail freight issues and they intend to involve the industry fully in the development of the High Level Output Specification which, as my noble friend Lord Berkeley pointed out, forms the basis of the allocation of resources.
	In the interests of clarity, the High Level Output Specification is the notice from the Secretary of State to the Office of Rail Regulation as part of the access charges review process, and it will be the key statement of his strategy for the railway for the coming period. It will include information from the Secretary of State and Scottish Ministers, as appropriate, about desired outputs and finances for the rail industry over the review period.
	New paragraph 1D(4) of Schedule 4 lists standards and objectives with respect to particular matters that may be included in the specification. As my noble friend Lord Berkeley indicated, the list is permissive in nature, but it is not exclusive. It includes such things as objectives and standards with respect to the capacity of networks, journey times and the reliability of trains on the network. But the list does not limit what the Secretary of State can do. He could include within the specification standards and objectives in respect of the interests of the users and providers of services for the carriage of goods by rail in the information that he provides to the Office of Rail Regulation.
	We are well aware that the High Level Output Specification for passengers is bound to affect freight operators. After all, freight operators use the same tracks on the same networks as passenger operators. Therefore the Government will need to ensure that they are aware of the potential effects on freight of any decisions that are taken in setting the specification. We have already begun what we consider to be constructive discussions with the freight industry on this very important point.
	Furthermore, under Section 4 of the Railways Act 1993, as it would be amended by this Bill, the Secretary of State would already be under a duty when carrying out his functions as part of the access charges review process to carry them out in a manner he considers best calculated to protect the interests of persons providing services for the carriage of passengers or goods by the railway in their use of any railway facilities which are vested in a private sector operator.

Lord Davies of Oldham: My Lords, a great deal of the detail in the list referred to by noble Lords involves passenger transport services. The noble Lord, Lord Bradshaw, stressed that point. However, I want to emphasise, as I did in Committee, that the High Level Output Specification could include freight because, over the period that the specification is due to run, it would not be possible to construct one in relation to passenger services which did not take into account the needs of freight. So the duty will apply in respect of the prices charged for such use and the quality of the service provided.
	I think that this will provide the protection argued for very forcefully both today and in Committee by noble Lords. Indeed, given his declared interest in the rail freight industry, I want to reassure my noble friend Lord Berkeley that we consider this to form the basis of a reassurance to the industry that their interests with regard to the development of the specification and thus the development of the railway itself will be taken fully into account.
	The amendment would not give any new powers or any new obligations to the Secretary of State and the interests of freight operators will already be protected by the Bill. So, while I recognise the strength of the arguments put forward, it is clear that we do not foresee the future development of the railway without acknowledging the very important part that freight services have to play—particularly given the remark made by the noble Lord, Lord Bradshaw, that road congestion issues also need to be tackled by ensuring rail freight provision.

Viscount Astor: My Lords, Amendment No. 3A is grouped with Amendments Nos. 5 and 6. At this stage, I shall not speak to Amendments Nos. 5 and 6 and I shall not move Amendment No. 5. However, if they so wish, the noble Lords, Lord Bradshaw and Lord Berkeley, can move that amendment when we come to it.
	I thought long and hard about whether to cover this important issue with a number of small amendments or one large one. I eventually decided that it would be easier to bring forward one large amendment. I am afraid that I shall not be brief in summarising it because of the complexity of the issue, and I apologise in advance for that.
	This is a serious issue which concerns the outcome of access charges reviews by the Office of Rail Regulation. Perhaps I may give your Lordships a little of the background. On 9 February 2004, the Secretary of State assured Parliament, the industry, the public and the investment community about a number of matters in the rail review. I am sorry to say that the Bill breaks those assurances.
	The noble Lord, Lord Davies, has been most helpful during the passage of the Bill and in correspondence. However, I regret to inform your Lordships that in the Minister's defence of the provisions of the Bill, in the statements that he has made to the House, and indeed in the letters that he has kindly provided to your Lordships, he has not satisfied noble Lords on this side of the House on this issue.
	I remind your Lordships of what the Secretary of State said in a Written Answer to a Parliamentary Question on 9 February 2004:
	"The Government also rules out any change to the rights of third parties, which will be protected. There is no question of weakening the effectiveness of economic regulation . . . There will be no diminution in the regulatory protection of the private sector investors in the railway ... The review announced on 19 January will consider how the Government can control the total public expenditure on the railways, while respecting the principles set out above".—[Official Report, Commons, 9/2/04; cols. 1237-1238W.]
	I contend that the Bill does not, unfortunately, respect those principles.
	Under Schedule 4, the Secretary of State is to give notice to the Office of Rail Regulation of what he wants the industry to achieve and the funding that he will make available over a review period. It is, therefore, the Secretary of State who sets the outputs; we are told that it will be called the high-level output statement. The Bill says that the information will cover the types and numbers of trains, the frequency of passenger services, journey times, reliability, overcrowding, the levels and types of fares, the quality of information provided to passengers, major projects and so on.
	That is fine as far as the franchising outputs are concerned, but with regard to the work that Network Rail is to do—the network outputs—it is a change to the current situation. Until now, the ORR, not the Secretary of State, has set the network outputs, having been informed of the franchising and other strategies of the Strategic Rail Authority. The Bill changes that. It is a change to the rights and protections of third parties to have network outputs set by the ORR and not the Government. That is a diminution of their protection, something that the Secretary of State promised would not happen. I will try and explain why.
	Freight and passenger operators are clear that, by taking from the ORR the role of setting network outputs, the Government are increasing the risks for those operators. They lose the stabilising role of the independent regulator, intervening to ensure that network outputs are protected and that the decisions are taken on a proper basis. What are the risks? Quite simply, the Government—that is, the Treasury, with its perpetual hostility to the railway industry—could, through this new power, require the industry to cut back on maintenance and renewal, so putting the network into a slow decline to save money for short-term reasons.
	Under the Bill, the Secretary of State does not have the public interest duties of the ORR to promote efficiency and economy and the development and use of the railway system. The ORR does not work according to short-term or political criteria. In setting network outputs under the Bill, the Secretary of State does not have to take into account the medium- and long-term view of the interests and the health of the industry. The Secretary of State is, in effect, entirely in the hands of the Treasury.
	The Treasury will probably do what it consistently did throughout the 50 years of the industry's nationalisation—slowly and inexorably starve it of funds. That is what the Bill allows. It puts in place a very effective mechanism by which the Government will remove the protection that the independent regulator provides against politically inspired cash starvation of the industry.
	I have put down the amendment to rein back the worst excesses of Schedule 4 and restore the protections that the private sector investors in the railway industry need, while, importantly, maintaining the right of the Government to make public expenditure decisions that are consistent with the rights of private operators.
	In many respects, my amendment would give substance to the assurances given in correspondence during the passage of the Bill through Committee. But assurances are one thing and legislation another. If there is to be a protection, the best place for it is in the Bill.
	My proposed paragraph 1G(3) of Schedule 4 deals with the situation in which the Office of Rail Regulation faces a cash squeeze between the high-level output specification that the Minister has said he wants under paragraph 1D and the public financial resources the Treasury has told him he has to use to buy those outputs. The two do not match, and one of them has to give way.
	As Schedule 4 stands, it is always the outputs which have to give way. It can never be that the public financial resources have to be increased. Of course, the Minister will say that the Secretary of State can get more money from the Treasury. That is undoubtedly true, but what happens if he does not and the ORR has to decide where the cuts will fall? They could fall anywhere. What protections are there then for the freight and passenger operators? The answer is that there are none in the Bill.
	We are told that the ORR would have to make sure that as far as possible, existing contractual rights would be honoured. That is not enough: the railway network code, which is part of those access contracts, contains provisions that allow the network outputs—the capacity or condition of the network—to be reduced without the contracts being broken. The contracts may well be intact but the freight and passenger operators would still face those reductions. So, the operators need better protection.
	Under the franchise agreements, the franchisees have to deliver certain specified levels of services to their passengers. In doing so, they are dependent on the capacity and condition of the network, which enables them to produce their service. What happens if the network is deteriorating because the Government have embarked on a policy of cutbacks and if speed restrictions, for example, are higher than they would otherwise be or capacity has been reduced because the network's condition is getting worse? In such a situation, the franchisee is squeezed. Nothing in his franchise agreement allows him to turn to the department, as the successor to the Strategic Rail Authority, and say, "You can't penalise me for poor performance, which is in my contract, if the network is declining because the Treasury has decreed that it should. I need relief in this case, otherwise I am in the impossible situation of being committed to deliver high standards under my existing franchise agreement but being unable to do so because you are cutting back on Network Rail's funding". For those reasons, my amendment would provide freight and passenger operators with the necessary protections.
	Paragraph (3) of the amendment says that the ORR cannot make a decision under paragraph 1G(2) to cut back on the network outputs unless it satisfies the requirements of paragraphs (4) and (5). Paragraph (4) provides that, before the Office of Rail Regulation can decide on network cutbacks under paragraph 1G(2), it must consult the affected operators. That must be right. They are decisions of considerable importance to the operators who use the network.
	Paragraph (5) says that having done that, the ORR may not make a cutback determination under paragraph 1G(2) unless two conditions have been met. The first concerns access contracts. The value of the rights of the operators must be maintained, or they have to receive adequate financial compensation out of public funds. So the Government can still cut the railway, but they must compensate operators if they sustain a loss as a result. That loss would be measured by the value of their existing contracts.
	The second condition in paragraph (5) concerns franchisees. If there are to be network cutbacks, the franchisees must have amendments to their franchise agreements that relieve them of the obligation to meet impossible or more onerous targets or standards of performance as a result of the ORR's Treasury-inspired network cutbacks decision.
	These protections should be uncontroversial. They require the Government to honour the assurances that the Secretary of State gave at the beginning of the rail review in 2004. They do what we are told in correspondence from the Minister ought to happen anyway, but they provide the protection in legislation.
	The final paragraph of my amendment, paragraph (6), is important, providing the protection that the operators need. It follows from the previous two. It provides that if the ORR has been prevented from making a network cutback determination under paragraph 1G(2) because one of the conditions in proposed paragraph (5) has not been met—either access contract rights are being unjustifiably diminished in value or franchisees are not getting the relief they need—then, if the outputs cannot be turned down, the amount of public money to pay for them must be turned up. They have to be paid for, and in these limited but significant circumstances the Treasury will have to swallow the fact that the Government cannot ride roughshod over people's legitimate and valuable rights without having to pay for that. That fact must follow if the Government are to honour the assurances that they gave last year and if private sector operators in the railway industry are not to be exposed to unjustifiable interference in their rights.
	My amendment would give the Government the flexibility that they say they need in controlling public expenditure—an important point—but also balances that need in cases where private rights are threatened or may be trampled on. I beg to move.

Lord Morris of Manchester: My Lords, in moving Amendment No. 7, which stands in my name and those of other noble Lords, I shall speak also to Amendments Nos. 8, 9 and 10.
	We have, of course, been here before. At Second Reading, I drew attention to the concerns of passenger transport executives—PTEs—about the Bill's affect on their ability to ensure that the public transport needs of their areas are met. In pressing their case for what these amendments now seek to achieve I was supported by, among other noble Lords, my noble friends Lord Burlison and Lord Faulkner and the noble Baroness, Lady Scott, speaking for the Liberal Democrats.
	The PTEs' case won further strong support in Grand Committee, when regrettably I was hors de combat—and notably from the noble Lord, Lord Bradshaw, who initiated the debate there on 3 March; from my noble friends Lord Snape and Lord Berkeley; and from the noble Viscount, Lord Astor.
	I found two of their speeches deeply evocative. First, that of the noble Lord, Lord Bradshaw, who with his long involvement in public passenger transport management, paid warm tribute to the memory of the redoubtable Lord Sefton of Garston. He said:
	"I was divisional manager in Liverpool in 1973, when the Merseyside PTE built the loop and link system . . . That came about through the energies of Bill Sefton, who then became Lord Sefton and who as PTE chairman went to Downing Street and banged on the door and got the money".—[Official Report, 3/3/05; col. GC160.]
	Some 22 years before then, Bill Sefton was my parliamentary agent when, as Labour's youngest candidate in the 1951 general election, I contested the Garston division of Liverpool. The kindly tribute made by the noble Lord, Lord Bradshaw, to Bill's achievements in this policy area left me reflecting on how extremely serious it would have been for the people of Merseyside had his mission to Downing Street failed.
	Perhaps I could leave it to the noble Lord, Lord Bradshaw, to explain just how fortunate those who instructed this Bill's draftsmen are that my late and still widely mourned parliamentary agent is not here to back these amendments today.
	The other speech I found so evocative was that of my noble friend Lord Snape. I have known him as someone well worth listening to on public transport issues since the 1970s. Not only did he work on the railways from boyhood, but he was involved in them from birth. His father, whom I also knew well, was a highly regarded representative of railwaymen.
	The speech made by my noble friend in Committee exploded the myth that the Bill as now drafted would speed up negotiations between franchisees and PTEs. In truth, as he said, it would considerably prolong them. He was demonstrably right also to stress that, in sharp contrast to the pledge in last year's White Paper to devolve responsibilities to the PTEs, decision-making would be centralised rather than devolved.
	That contrast is highlighted by the publication this morning of the Commons' Transport Committee report on light rail, with its pointed criticism of current limits on local power outside London to control local bus services. The report says they have,
	"hindered the development of integrated transport systems".
	The Select Committee calls for more local decision-making, not less, to secure integration; and the rights of PTEs to prescribe their own rail services are a prerequisite of successful integration. Surely none of us here wants now to compound the problems so clearly identified by the Select Committee.
	It is because the case made for the amendments at Second Reading was so strongly reinforced in Committee that it need not be restated at length today. We debate them now, however, in a much different parliamentary setting. I refer to the imminence of a general election, and the involvement of all parties in deciding which of the Bills currently before Parliament can still by agreement be enacted in the days left before dissolution.
	Thus we need to know today, in detail and in this debate, not only the Government's position on the Bill's future—which I am sure will be clearly stated by my noble friend Lord Davies—but that of each of the Opposition parties. Is the Government's position that they will withdraw the Bill if these amendments are carried, or simply that they would prefer the Bill not to include them? Are the other parties determined not to allow the Bill to become law without them? We need to know exactly where we stand with all parties in advance of the haggling soon to begin.
	I am now in my fourteenth Parliament and, as a Front Bencher for 23 of my 33 years in the House of Commons I had much direct involvement in pre-dissolution haggling. Time and again over the years I heard junior Ministers threaten to drop Bills rather than accept amendments, only to be left eating their own words on instruction from on high. The essential needs are always for candour and clarity from all parties; and never were they needed more than in the case of these amendments today.
	Amendment No. 7 would introduce three new sub-sections into Clause 13 to preserve current PTE powers to specify local rail services, and to have them incorporated in franchise agreements. One serious concern about the Bill is that, despite repeated assurances by Ministers to consult them, there is still nothing in its provisions to ensure that the views of PTEs will be taken into account or worked into franchise agreements.
	Amendment No. 10 makes it clear that a PTE may not specify services for franchises that include services only to and from its own area. This clarification was made in direct response to the concerns raised by the Minister in another place, and I trust that my noble friend will accept it.
	Amendment No. 8 would preserve PTEs' existing powers to be parties to franchise agreements. When this issue was addressed in Committee the Government's response was totally unconvincing. It was based on a mistaken assumption that co-signatory status for PTEs involved additional costs and complexities that would outweigh the benefits of PTE involvement. The outcome has been further to increase all-party support for the amendment.
	Co-signatory status on rail franchise agreements is crucial in providing PTEs with important rights of benefit to passengers. They include: the right to consultation on service changes; the right to approve increases in local fares above regulated levels; the right to require participation in multi-modal ticketing schemes, integrated transport schemes and concessionary travel arrangements; the right to receive performance information on punctuality, cancellations and provision of capacity; and the right to be consulted on de-staffing of local stations and improvements to access for disabled people.
	Amendment No. 9 deals with disputes and the need to preserve current statutory provision for the Secretary of State to disapply the Strategic Rail Authority's obligations and PTEs' rights under Section 34 of the Railways Act 1993 where any dispute is referred to him. Again, this amendment is in response to concern expressed at the Bill's earlier stages and bears further testimony to the readiness of PTEs to listen and respond reasonably.
	Taken together, the amendments would allow PTEs to vouchsafe the best possible transport services for their areas. Failure to accept them would gravely damage their ability to do so.
	Yet there is a further compelling reason for these amendments to be accepted. I refer to the proceedings on the Bill in another place on 27 January. MPs from Greater Manchester had tabled amendments of the same effect as those that we are now debating. In doing so, they were reflecting serious public concern all across the conurbation about the threat the Bill constitutes to local decision-making on public transport. All their amendments were guillotined. In the words of one MP, they were,
	"unceremoniously dumped in the wheely-bins of Westminster".
	Thus the only way for Greater Manchester MPs to have any say on an issue of such high importance to thousands of their constituents is for these amendments to be incorporated in the Bill as it returns to the House of Commons.
	Nothing could explain more succinctly, or more starkly, the importance of the role of this House vis-à-vis the Bill. I hope the amendments can be accepted, not after haggling behind closed doors but here, by open agreement, on the Floor of the House of Lords today. I beg to move.

Lord Snape: My Lords, I start by declaring an interest as an employee of the National Express Group. I do not wish to detain your Lordships for more than a few moments, because the matter was debated extensively in Committee. I am grateful to my noble friend Lord Morris of Manchester for his kind words about my contribution at that stage.
	Governments regularly do things that many of us in this House and the other place find baffling. We are, of course, expected to support the government to which we give our political allegiance, although we may be baffled, but I must confess that I cannot understand the Government's view of this matter. A government that profess to want to listen to the voice of local democracy should not behave in this way regarding PTEs.
	I make no special claim to any greater experience than anyone else in your Lordships' House. Although I have been here only a short time, I am aware of the danger of so doing. But I pointed out in Committee—I do not wish to repeat anything that I said there—that, as an employee of the National Express Group, I joined the team that was successful in gaining the Central Trains franchise eight or nine years ago, and we were subjected to some thorough cross-examination by PTE and PTA members at that time.
	I can also claim, as my noble friend reminded me, that I was, although it was 30 years ago, a member of the somewhat clumsily named, South East Lancashire and North East Cheshire PTA. Again, at that time, in the aftermath of many of the cutbacks of the Beeching era, that PTA in that area fought not just to preserve the local services that remained, following the ravages of the good or not-so-good Dr Beeching, but to increase those services. We are seeing a similar pattern emerge throughout the PTE areas in the United Kingdom.
	North of the border, where the Scots have their own Executive and PTE—perhaps they are doubly blessed—there has been enormous progress towards reopening long-closed stretches of railway line. Indeed, in the past few weeks, the wide-scale reopening of the Waverley line has been announced. Are we seriously considering that such advances would be made if these matters were left to the Department for Transport—whatever it is called, wherever it is based and whichever government is in power? I doubt that such a happy situation would come about in those circumstances. Sometimes it seems to me that Ministers, in whatever government, and their civil servants, regardless of government, are most concerned to see that their own services, inevitably based in London and the south-east, are not just preserved, but extended. That fleet of ministerial cars does not just bring Ministers to their departments, it brings many civil servants, and it can regularly be seen parked outside main line stations in this city.
	Yet, as the noble Lord, Lord Bradshaw, reminded us, matters outside London are all too often seen as being "somewhere else" and "someone else's problem". Yet, the very people whose voices should be heard in the planning and expansion of their rail services will, if the Government fail to accept the amendments, will not be heard. Their experiences will be discounted and, despite being answerable to their electorates, they will obviously play no part in the planning of rail services in their areas.
	I cannot believe that that is what my noble friend on the Front Bench believes, although I do not know what it might say in the brief that he must deliver on behalf of the department. My noble friend and I have been friends for many years—although I might be straining that bond by my comments. After all, if I remember correctly, we were founder members of a football team in the other place. I might well receive a good kicking as a result of my contribution today. Seriously, I cannot believe that a Labour Government can behave in this way towards passenger transport executives, who have brought not only their money and expertise to local rail services in their areas—throughout the UK—but have brought the wishes of their electors to bear in improving those rail services.
	I am not sure what my noble friend's intentions are with regard to the amendment. However, whether or not the negotiations, about which I continue to hear a great deal, take place in the next few days, I hope that the Government will look again at the matter and ensure that the voice of local democracy is not only heard but is preserved for the future.

Lord Davies of Oldham: My Lords, PTEs can do that because the franchise is wider than just that particular provision. The Secretary of State has responsibility with regard to the overall franchise. What has happened in the past, as my noble friend will recognise, is that PTEs as co-signatories have been able to indicate that unless certain requirements have been met, their co-signature will not be forthcoming. Effectively, there can operate a degree of veto, while not having the overall responsibility for the consequences of that franchise not having been achieved. The responsibility for that—as envisaged in the whole of the Bill; indeed, it is what the Bill is about—is the responsibility of the Secretary of State.
	Within this framework the Government are not seeking to reduce the constructive role of the PTEs. We all recognise the virtue and value of local contributions in those terms. That is why I am hopeful that my noble friend will withdraw his amendment. The old system produced a degree of adversarial challenge about the allocation of resources and decisions, while he new system is based on co-operation and partnership. It is on that basis that we intend to go forward.

Lord Bradshaw: My Lords, we on these Benches welcome the alterations made in response to representations made and the fact that there will be parliamentary scrutiny, albeit of the negative, rather than the affirmative, variety. I reserve judgment on that, partly because I wonder how much notice will be taken of the public representations that will no doubt be made following the publication of the Government's closure guidance.
	I realise that I have only a draft copy, but there are one or two welcome points in it: for example, it says that cost savings that might arise from withdrawing services or closing parts of the network will be important. It also says that cost savings should be as detailed and as accurate as possible rather than being based on broad averages. Broad averages were used in the Beeching closures and, as a result, the money that it was said would be saved was not saved because broad average costs cover a much wider range of activities that were still considered to be necessary.
	There is also provision here for consideration of micro-franchises and other local people running services in the absence not of the main franchisee but of someone else. Another operator could step in to provide the services which otherwise it was proposed to close. In those circumstances, I hope that the Government will consider leasing the track to such an operator on a peppercorn-rent basis or something similar, as operators are never going to be able to take on very large-scale costs.
	However, I ask the Minister to ensure that in these assessments care is taken to use plain English which people can understand. I am afraid that I have been associated with the railway for a long time—back to the days of Beeching. I have attended closure proceedings and the obfuscation which surrounded them was manifest. The documentation used in support of them was more to confuse the people rather than to enlighten them. I ask that plain English is used in all these matters so that people can understand what the Government are saying. Otherwise, I welcome the changes made by the Government and I am sure that they will go some way to mitigating the concerns expressed to us.

Lord Davies of Oldham: My Lords, at this juncture I can only reiterate that on this point we are addressing it on the concept of joint guidance. I thank the noble Lord, Lord Bradshaw, for his welcome of certain crucial features of the draft guidance. I assure him that, of course, further representations will be welcome and taken on board. He will recognise the areas where he sees some improvements, and I pay tribute to the fact that he identified those weaknesses in Committee and emphasised that it would be advantageous for certain concepts to be identified in different terms. I am grateful to him for that and for his continuing interest in this area.
	On the more general issue, he will recognise that I am prepared to accept his plea for plain English. We are all in favour of plain English on all occasions. The problem with plain English at times, as our lawyers are prone to tell us, is that it may not have quite the degree of accuracy that is sometimes necessary, both in legislation and in guidance. I want to reassure the noble Lord. He has laid this complaint presumably against my department, the Department for Transport. In falling short of the highest standards of plain English on occasions, I just say that it is not alone.
	Many other departments can be open to this challenge. We all bear the cross which the noble Lord urges us to bear; namely that on occasions we shall get complaints about complexity on issues which are genuinely complex. He will recognise one in particular, which is the whole question of costs and cost-benefit analysis, where jargon creeps in. I agree with the noble Lord that unless the legislation is in plain English he will not be satisfied and I shall not understand it.

Baroness Scotland of Asthal: My Lords, I beg to move that this Bill be now read a second time.
	The Bill before us today is a tightly focused package of measures that aims to steer people away from a life of crime and into treatment, while making tougher powers available to the police and courts to deal with those who refuse to turn their backs on drugs.
	I am grateful for the wide measure of cross-party support for the large majority of the provisions in the Bill. I hope and expect that your Lordships' House will wish to continue the constructive dialogue that was evident during the debates in the other place. That is not to say, however, that there are not differences of opinion on the precise detail of some of the clauses, nor that we should not properly discharge our responsibility to scrutinise carefully the legislation that comes before this House.
	The Government's drugs strategy is firmly focused on reducing the harm that illegal drugs cause to society at all levels. We are tackling the problem from every possible angle, and are reducing the supply of drugs that enter the United Kingdom, while educating our young people about the harms caused by drugs, in order that they do not ever become problematic drug misusers. Where people have become involved in misusing drugs we aim to get them into treatment, and away from crime.
	Our strategy is having a marked impact. Drug dens are being closed and local drug markets are being disrupted. Operation Hatch is compelling evidence of the success that we are having in tackling drug dealing in our cities. This multi-agency, undercover operation targeted class A drug dealers in Humberside. Drug-using communities were infiltrated and high-quality evidence of drug trafficking was gathered. Since January 2004 the operation has resulted in hundreds of people being arrested and charged, with total custodial sentences in excess of 600 years being meted out.
	I must also note that class A drug use by young people has stabilised since 1998 after years of increase; and 54,000 more people are in treatment compared with 1998. Those very people are being diverted away from a life of crime.
	The focus of the National Treatment Agency has been on reducing waiting times and increasing capacity with the aim of increasing the numbers of drug users in treatment. Its programme for increasing the numbers in treatment has been successful and the NTA will now be working on improving effectiveness and retention of drug users in treatment services.
	The latest National Drug Treatment Monitoring System (NDTMS) data showed that 90,500 individuals either successfully completed treatment in 2003-04 or were retained in treatment on 31 March 2004. The NTA will be building on that progress.
	The Government announced in 2004 that they are to increase their investment in drug treatment from £253 million in 2004-05 to £478 million by 2007-08. The NTA will be using some of these funds to enhance treatment effectiveness by: continued improvement in the quality of drug treatment provided; improvement and expansion of the case management of drug misusers including supported access to social integration services; and ensuring that the needs of women and black and minority ethnic groups are being met within services that are planned and provided.
	We must not underestimate the challenges ahead. To stay one step ahead of drug barons we need to ensure that we have the right structures in place and the necessary, but proportionate, powers at the disposal of the police and courts.
	We know that there is no room for complacency and that we must continue to build on the successes we have seen to date. That is why our strategy for the next three years will drive us to further reduce the availability of drugs and put even more drug dealers out of business. In order to do that we need to tackle production in source countries and disrupt international traffickers along with regional drug barons and local street dealers.
	We shall continue to improve the education available for young people and will expand the routes into support and treatment services for the most vulnerable. We are also increasing the provision, quality and effectiveness of treatment, including in prisons. The Drugs Bill is a key part of that strategy, and was informed by the concerns raised by the police about the powers they need to tackle street-level drug dealers, and by the consultation that was carried out last summer, following publication of Policing: Modernising Police Powers to Meet Community Needs.
	The majority of the measures within Parts 1 and 2 of the Bill are specific, targeted powers that will help the police tackle the problem of street-level dealing of class A drugs. I propose to take a little time in opening because I know that a number of issues have caused concern to noble Lords. I wish in opening to deal with them as fully as I can.
	In Clause 1 we stipulate that a court must treat dealing on or within the vicinity of school premises at a relevant time, or using a person under 18 as a courier, as an aggravating factor when considering the seriousness of the offence of supply committed by an adult. The aim of the provision is to protect children from exposure to drug dealing while they are attending school, and more generally.
	The Sentencing Guidelines Council has issued excellent guidance, which courts "must have regard to" when deciding on the seriousness of an offence. Those list, among other aggravating factors, "deliberately targeting vulnerable victim(s)". However, while that would cover supplying drugs to young people on or in the vicinity of school premises, it is unlikely to catch adults supplying to adults in that area. We want to catch such dealing between adults on the basis that it exposes children in the vicinity to a risk and because we want to eradicate such risks from the vicinity of school premises.
	Furthermore, while the guidance is well known to courts, we wish to send a wider message to dealers about how they will be treated should they deal on or in the vicinity of school premises and a message of reassurance to parents, who we know express concern about dealing near schools.
	While the Sentencing Guidelines Council has issued excellent guidance on many matters, including in respect of targeting vulnerable victims, we believe that the issue of dealing in the vicinity of school premises is of such importance that Parliament should issue a benchmark in that respect.
	During debate in the other place much time was spent on Clause 1, in some cases because the Opposition wanted to widen the scope of the clause by extending protection to other places where young people congregate, for example, and on other occasions by introducing amendments that would potentially restrict the scope of the clause by defining in the Bill what we mean by "in the vicinity". I hope that the Government's position on the clause is now absolutely clear. The clause will remain tightly focused on the problem at hand: the protection of children while they are at school and from being used as drugs couriers.
	We have provided examples of the factors that we imagine will be guiding factors for the courts to have regard to when they are considering what constitutes "in the vicinity". But we are clear that it is not appropriate to define in primary legislation what constitutes "in the vicinity", as the term is used without further definition and without problem in other legislation.
	It was also suggested in the other place that we should widen the scope of the provision to make it an aggravating factor for drug dealing to occur on or in the vicinity of school premises at any time. With the greatest respect, there is no benefit to that proposal, because it would effectively mean that someone dealing in the vicinity of school premises in the middle of the school holidays, when they were not exposing any school children to the risks of drug dealing, may receive a harsher sentence. Let us be clear that we are protecting children during the time that they are present on school premises. If children are targeted at other times, courts already have discretion to treat the offence as aggravated on the basis that the defendant has targeted vulnerable victims.
	Clause 2 creates an evidential presumption of intent to supply where the defendant is found to be in possession of a particular amount of a controlled drug. The effect is that where the presumption applies, a court or jury must assume that the defendant intended to supply the drug which is in his possession. We intend to make it more difficult for those dealing drugs to claim falsely that drugs in their possession are for personal use.
	The particular level of a drug that will give rise to the presumption will vary from drug to drug. It will be prescribed in regulations approved by a resolution of both Houses. In formulating those regulations the Secretary of State will consult the Advisory Council on the Misuse of Drugs. The thresholds set will be proportionate to the offence of possession with intent to supply the particular drug in question, to ensure compatibility with the European Convention on Human Rights.
	Clause 3 amends Section 55 of the Police and Criminal Evidence Act to allow a court or jury to draw such inferences as appear proper, should consent to an intimate search be refused without good cause. Currently, a person's consent is not required under Section 55 of PACE for an intimate search to be undertaken. Its purpose is to enable those in possession of controlled drugs to be brought to justice by deterring those who conceal them in body cavities from withholding consent without good cause, and enabling courts and juries to act should they do so. Clause 4 makes similar provision for Northern Ireland.
	Clause 5 enables a police officer of at least the rank of inspector to authorise an X-ray or ultrasound scan of a person arrested where he has reasonable grounds for believing that the person may have swallowed a class A drug that he had in his possession with intent to supply. Its purpose is to give police an indication of the need to detain someone to allow drugs to pass through their body. Clause 6 makes similar provision for Northern Ireland.
	The Criminal Justice Act 1998 provided for a magistrates' court to commit a person charged with possession of a controlled drug or a drug trafficking offence into the custody of a customs officer for a period of up to 192 hours. That period of detention is designed to enable the recovery of evidence. Clause 8 gives magistrates similar powers to remand a person upon charge to the custody of a police officer, for a period of up to 192 hours.
	For the avoidance of doubt, I make clear that Clauses 1 and 2 apply to England, Wales, Scotland and Northern Ireland. Clauses 3 and 4, taken together, apply the provision regarding drug offences searches to England, Wales and Northern Ireland. Similarly Clauses 5 and 6, taken together, apply the ultrasound and X-ray provision to England, Wales and Northern Ireland. Clause 8 also applies to England, Wales and Northern Ireland.
	Let me briefly explain the powers in the other parts of the Bill. The powers that provide for testing on arrest and follow-up assessment will help us identify those who are misusing drugs at an earlier stage in their contact with the criminal justice system, allowing us to steer them into treatment and away from crime as soon as possible. Police will be given a power to request a person who has been arrested in certain circumstances to provide a sample for the purposes of testing for specified Class A drugs—heroin and crack/cocaine—and, where a person tests positive for such a drug, will have a power to require those persons to attend an initial and follow-up assessment of their drug misuse. Where the assessor conducting the initial assessment does not consider it appropriate to require the person to attend the follow-up assessment, that second requirement will cease to apply.
	Since anti-social behaviour orders were introduced, they have become a vital tool. The new civil intervention order that we seek to introduce will allow us to continue tackling the underlying causes of a person's anti-social behaviour. A court will be able to impose an intervention order in the interests of preventing a repetition of the person's anti-social behaviour. The order can direct the person to take part in activities prescribed by an appropriately qualified person that will help to address their substance misuse issues.
	Clarifying the status of fresh magic mushrooms as a controlled drug will, we hope, decrease the trade in a harmful and hallucinogenic drug, that is on a par with LSD.
	I anticipate that the issue of cannabis is likely to be raised by noble Lords during this debate. As noble Lords will be aware, cannabis was reclassified to a class C drug on 29 January 2004. My right honourable friend the Home Secretary wrote to the chair of the Advisory Council on the Misuse of Drugs, Professor Sir Michael Rawlins, on 18 March to ask the council to conduct a comprehensive assessment on cannabis and its association with mental health problems. My right honourable friend wanted to be clear what influence the evidence presented in the more recently published studies had on the overall assessment of the classification of cannabis.
	The Advisory Council on the Misuse of Drugs had considered possible links with mental illness prior to reclassification. It concluded that there is no proven causal link between cannabis use and the development of mental illness, such as schizophrenia, although cannabis use can unquestionably worsen a mental illness which already exists. Heavy cannabis use can produce a psychotic state, although this is in most cases short-lived. The use of cannabis should be discouraged in all people with mental health problems.
	Since the Advisory Council on the Misuse of Drugs published its cannabis report in March 2002, it has continued to monitor new cannabis studies. It will consider further studies such as the Ferguson report from New Zealand published in March. The Advisory Council on the Misuse of Drugs will agree its terms of reference of the review at its next meeting on 19 May and arrange its work programme. It is intended that council will have concluded its assessment by its November meeting.
	I hope that your Lordships will agree that it is vital that young people, in particular, are fully aware of the harms of taking drugs and can access the relevant information. The Home Office, in conjunction with the Department of Health and the Department for Education and Skills, have been developing a series of health messages around cannabis use through the FRANK campaign, with which I know that several noble Lords will be familiar. It is part of a broader communications programme targeting 13 year-olds to late 20 year-olds to communicate the mental and physical health risks associated with cannabis use. Other elements to the program include targeting heavy and frequent cannabis smokers. The Government have been working closely with mental health organisations to produce materials for sufferers, carers and health professionals.
	I should also mention the matter of the plant khat, which is known to be misused primarily within Somali communities in the UK. It is a plant which, when chewed, has an effect analogous to amphetamines. Khat suppresses appetite and is connected to problems of insomnia, anxiety and aggression. It is not a controlled drug under the Misuse of Drugs Act 1971. The communities affected typically have high levels of male unemployment, low educational standards and high levels of poverty. Recent reports suggest a hidden issue of domestic violence. Excessive khat use can lead to psychotic reactions, although mental health issues among the Somali community are complex and can be related to post-traumatic stress.
	The Government are very concerned at the social damage that khat misuse has on those communities. During the Committee stage of the Drugs Bill in another place, the Opposition tabled a new clause to control khat as a class A drug. In Committee, on 3 February, the Drugs Minister undertook to refer the matter to the Advisory Council on the Misuse of Drugs and subsequently wrote to the chair of the council, Professor Sir Michael Rawlins, to conduct an assessment of whether there was a case for making it a controlled drug. We will await the deliberations of the Advisory Council on the Misuse of Drugs, which are expected before the end of the year. Khat does not fit the profile of other drugs, as its misuse is restricted to one or two ethnic groups. Its potential to become a controlled drug should be considered in that context.
	I am aware of the special interest that the noble Lord, Lord Adebowale, has in the issue of khat misuse, as part of his wider interest in all matters relating to substance misuse. The care organisation Turning Point, which he heads, has recently published an excellent report detailing the social impact of khat misuse. The report's conclusions will be fed into the considerations of the Advisory Council on the Misuse of Drugs.
	This Government have a strong record of success in tackling drugs. We are seizing considerable amounts of drugs that enter the country. We are disrupting those gangs that peddle drugs and spread misery. More drug misusers are entering treatment and being retained in treatment programmes. Our comprehensive programme of work for the coming years will ensure that such success continues. This Bill will better equip the police and courts to tackle street-level drug dealers and steer people into treatment and away from crime. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Baroness Scotland of Asthal.)

Lord Dholakia: My Lords, I thank the Minister for introducing and explaining the provisions of this Bill. I accept much of what the noble Baroness has said, and it makes sense. Perhaps I may add that I also endorse much of the concern expressed by the noble Baroness, Lady Anelay. At some stage, I hope that we will have sufficient time to deal with the issue in much more detail. But I suspect that we are back to the unreal situation.
	It is not controversial—it has the support of all parties—but it is important to bear in mind that, despite the fact that we give our broad support, it is dangerous to cut corners on legislation of this kind. The Bill is before us and it is right that we give our considered views on a matter that has seriously affected the pattern of crime in this country. Various attempts have been made to rationalise our policy on drugs and drug users. On the matter of drugs and the law, opinions are divided, and they will remain divided.
	The increasing availability and use of illegal drugs, along with large-scale alcohol abuse, are contributing to crime in our society. Systematic monitoring of our criminal justice system demonstrates example after example of the link between drug abuse and crime to pay for drugs. The public debate on this subject is often emotive. Frequent studies reveal differing and conflicting views. The report I have found most convincing is the report of the Independent Inquiry into the Misuse of Drugs Act 1971 chaired by Lady Runciman. It is an authoritative report based not on assumptions but on hard facts resulting from discussions held with some of the foremost experts and professionals in the field.
	The public are concerned about drug abuse and its consequences. Communities are blighted by drug users and dealers. I shall quote from a letter received this morning by my noble friend Lord Avebury from a resident of Soho:
	"We all know that drugs are endemic to the late night so called 'clubs' attracting a clientele mainly between the ages of 14 and approx 30. We all of us also know that there is an entire ecosystem that grows up around and in connection with these premises, from dealers to wholesalers to people who 'rent out' space in and around the premises late at night, who offer other sundry services and indeed a panoply of activities all of which are illegal and many of which are dangerous and most of which ruin the amenity of an area".
	The frightening aspect of this letter is the extent to which drug users and dealers threaten the residents of an area.
	These concerns will not go away. It must be accepted that there is a drug dependency culture and that it cannot be swept under the carpet. It is exploited by drug barons and dealers whose sole aim is to make money, irrespective of the harm caused to other people, particularly young people. In many countries, laundered money is used to buy arms to support wars around the world. It is a fact that large communities are often displaced, which adds to poverty, despair, and then results in refugees seeking asylum elsewhere. The issue of drugs is a serious problem which requires serious consideration. I am glad that the Home Office has at last seen fit to produce this legislation.
	During my days as a magistrate in Sussex, I came across many young people who had a detailed knowledge of drugs. The same could not be said for their parents. There is a wide gap between the solutions sought by parents and the knowledge possessed by young people.
	This Second Reading gives us an opportunity for an informed debate. In essence, but with some reservations, we support the Bill. If pushed hard, we would welcome a code of practice on extended police powers so that there is no doubt of the outcome of police action. That is because we have to confront these difficult issues with a view to seeking solutions. The Bill goes some way to providing those answers.
	The Drugs Bill is timely. But let me go back to the Government's response to the Runciman report. They missed the opportunity to modernise our drug laws and they ignored the balanced, research-based evidence, thus missing the opportunity to ensure better and more effective use of resources. I have no doubt that public opinion is comfortable with open and honest discussion.
	Research carried out across Europe demonstrates that we in the United Kingdom are increasingly out of step with developments in drug law. Often this has caused serious confusion in the minds of the public. The police seem to operate different standards in different parts of London. It is time to ensure absolute clarity on the part of the Metropolitan Police on this subject.
	On the one hand we want to adhere to international conventions, but we refuse to follow the example of other countries where there is greater flexibility within the rules. Belgium and Portugal focus on drugs as public health issues with prevention and treatment as key tools, placing less dependence on the criminal law. It is a shame that the Government's long-term strategy for tackling drugs to build a better Britain has had poor results.
	Let us look at the targets that have been set up: halving the number of young people using drugs, especially heroin and cocaine; halving the number of reoffending drug misusers to protect our communities from drug-related anti-social and criminal behaviour; doubling drug treatment measures and halving the availability of drugs on our streets, especially heroin and cocaine. But we still trail behind in drug treatment models in our penal institutions.
	There has been improvement, which is welcome, but we have a long way to go. A substantial reallocation of resources is needed to provide more treatment facilities. We cannot ignore the fact that the number of offences committed by addicts is reduced by one-fifth when proper treatment is available. We therefore welcome the emphasis on introducing new measures to deal with the problems caused by the misuse of controlled drugs. We also welcome the measures designed to break the link between drug use and crime.
	Those who target or peddle drugs to our children must be subject to harsher sentences. However, in the past I increasingly witnessed as a magistrate the harsh sentencing of mules who bring drugs to our shores while the real culprits are hardly ever caught. So I hope that the Serious Organised Crime Agency, which we will be talking about tomorrow, will make good progress in identifying and prosecuting drug barons.
	There are matters relating to police powers set out in Part 2. We want to scrutinise these to ensure that they are not simply prescriptive. They must be proportionate and not discriminatory in their use. This is not the time to go into the detail, and I do not intend to address the Bill clause by clause. However, I want to raise two points clearly identified by the Joint Committee on Human Rights.
	As the noble Baroness, Lady Anelay, pointed out, the Joint Committee has rightly questioned the statutory assumption about intent to supply when the possession of controlled drugs rises above a certain quantity in relation to Article 6(2) of the ECHR. The second matter concerns the use of X-ray, ultrasound or intimate searches which may not be compatible with Article 6(1). I want to add to the comments made by the noble Baroness and say that this is an issue where cultural sensitivities are also vital. The Joint Committee offers safeguards to overcome some of these concerns and I hope very much that they will be incorporated either in the Bill or in the Minister's response to the debate.
	The points raised by the Joint Committee are endorsed by RELEASE and the Transform Drug Policy Foundation:
	"We believe that the Bill is overly focused on criminal justice interventions that have a poor record of effectiveness. Arguments presented by the government to support these measures specifically around deterrent effects and reducing availability are not evidence based".
	I shall be delighted to hear what the noble Lord, Lord Adebowale, has to say on this matter.
	"Some clauses risk breaching the Human Rights Act 1998, especially Articles 6 and 8, which provide the right to a fair trial and the right to respect for a private life".
	Equally, we would like to see systematic monitoring to ensure that police powers do not have an adversarial effect on dealings with persons from ethnic minority communities.
	I am glad that the Minister at the Home Office, Caroline Flint, has gone some way in amending the Bill to ensure that the provisions of Clause 1 apply to any school premises, including any ancillary school building and playing fields. There are, of course, issues that one needs to tease out, but I am broadly satisfied with the amendments proposed.
	In conclusion, when we see the Bill again, let us hope that it is a product of adequate consultations with key stakeholders in the drugs field. It is nice to have a slogan, "Tough on drugs", but the effect of any legislative measures must make a real difference where drugs and the stability of our community are concerned.

Baroness Scotland of Asthal: My Lords, I thank all noble Lords who have participated in the debate. I say immediately to the noble Baroness, Lady Anelay, that I wish to associate myself entirely with the comments that she made at the end of her speech in the plaudits that she rightly gave to all of those who work so hard in the rehabilitation of those who have been addicted and therefore ruined by the abuse of illicit drugs.
	I understand the concern that has been expressed, most particularly by the noble Lords, Lord Mancroft and Lord Cobbold. I know that there are those who take a perfectly legitimate and proper view that the decriminalisation of all classified drugs would be the better course to take. I understand the arguments that they powerfully make in support of that contention, but each noble Lord will know that that view cannot be concurred with by Her Majesty's Government, for the reasons that I gave in opening and because of the nature of the consequences of so doing. I say to both noble Lords that this attempt by the Government does not fail to take into account the pernicious nature of drug abuse and the need for treatment; it is the reverse. It is the Government making clear that we fully understand that drug misuse is a health issue as well as a criminal issue. The thrust of the Bill is to try to address the demarcation between the two, so that those who are so sorely in need of treatment are better able to get it at an earlier stage, when intervention may be the most effective way of guaranteeing it.
	I shall now address the specific issues raised by the noble Baroness, Lady Anelay, and the noble Lord, Lord Dholakia, supported so ably by the noble Baroness, Lady Falkner. Each of them raised issues about how Clause 1 would work. The noble Baroness, Lady Anelay, asked with her usual care why we did not have an aggravated offence. We have been clear that the jury are the determiners of facts, such as where the defendant was and whether the matters complained of against him have been made out in terms of quantity of drugs, location and transactions.
	However, in relation to the sentencing, it is the proper role of the judge to say whether those matters were aggravating features, having taken them all into account. Additional matters may have to be borne in mind. The group attacked or targeted may have been a vulnerable group, so you have the element of vulnerability with that of location and the nature of the past-offending pattern of behaviour. The court will have to determine how far to go with treatment, punishment by way of detention, and rehabilitation. All those factors will be properly within the judge's purview. The better course would be, having set the template before the judge in an appropriate way, to allow the judge to exercise that discretion.
	The noble Baroness and others, including the noble Lord, Lord Cobbold, turned to Clause 2. Why have a presumption? I want to be clear that it is an evidential presumption. It is not a change in the burden of proof. The presumptions are rebuttable, but all other factors can be taken into account. Noble Lords will know that, on many occasions, it is asserted on behalf of a defendant that substantial quantities of drugs were in his possession for personal use. It is amazing on occasion what quantity of drugs can be purported to be available for personal use.
	The classification that we propose has the help of the medical services, which are able to judge—drug by drug—an appropriate benchmark. As noble Lords will know, each drug will differ, so it would be unsafe and unsatisfactory to prescribe a limit that would apply to all and implement it in terms of legislation. I hope that I made it clear in opening that, before the drugs are so identified, the Government will seek the advice of the Advisory Council on Misuse of Drugs. The level that will give rise to the presumption will vary from drug to drug. It will be prescribed in the regulations approved by a resolution of both Houses. The Secretary of State will consult, and your Lordships can be sure that he will give great weight to the advice that he gets from the advisory council. The evidential presumption of intent where the defendant is found to be in possession of a particular amount of controlled drugs is no more than that.
	I am sure that the noble Lords, Lord Mancroft and Lord Cobbold, know full well that Clause 21 clarifies the law on magic mushrooms. It does not necessarily reclassify magic mushrooms as class A drugs. Noble Lords will be familiar with the debate that has gone on for a long time about dried and fresh magic mushrooms, and why one is bad and the other one is not. That part of the Bill clarifies the position and, if I may respectfully suggest it, makes a little more sense of it than was so before. The Bill makes an important contribution.
	Issues troubled noble Lords about the nature and content of the examinations that would be brought about—the sensitivity that would be needed in terms of the cultural issues. I assure them that we are conscious of that importance. It does not mean that all such refusals will immediately be seen as culpable. What is important is lack of good cause. If there is good cause for refusal, no offence will be committed. It will be a question of fact. Those matters will be important to remember.
	We have had much discussion about the use of cannabis and whether reclassification was or was not right. I assure the noble Lord, Lord Adebowale, and others that the work that has been undertaken to inform young people better, particularly in relation to the FRANK campaign, will continue. It is important that we continue to look at the empirical evidence that we have available in relation to this and every drug, because the development of our policy must be founded on fact, not hyperbole or rhetoric. I thank the noble Lord, Lord Adebowale, for his kind compliments in relation to the efforts that have been made by the Government to refocus drug policy.
	I should also reassure the noble Baroness that the comments made by the noble Lord, Lord Adebowale, in terms of the use of cannabis were correct. Cannabis use among young people is not rising. The Schools Survey of 2004 shows that the use of cannabis by 11 to 15 year-olds has fallen from 13 per cent in 2003 to 11 per cent in 2004. The British Crime Survey shows slow but steady decline in the use of cannabis by 16 to 24 year-olds. In 1998 it was 28.2 per cent and has fallen to 24.8 per cent.
	Of course we need to do more, but it is not the case that this is a problem that is going up and up. So we must be responsible in the way that we look at this matter and it is right, notwithstanding the fact that it was only recently referred back to be looked at again, for us to look forward to the November indication of whether the classification that we made was correct.
	Other issues include residential rehabilitation, raised by the noble Baroness, Lady Anelay. She well knows that this is only one type of treatment. Not all of those rehabilitating from drugs will need rehabilitation in a residential setting, but it is necessary for those who are most amenable to it and to whom it will best apply. In relation to Article 6, raised by the noble Baroness, Lady Falkner, I hope that the comments that I have already made in relation to the rebuttable presumption have answered her points.
	I shall now deal with some of the other issues that were rightly raised by the noble Lord, Lord Adebowale, on the importance of concentrating on rehabilitation. The Government agree with him that it is important. Protecting the health and welfare of the British public is central to the Government's thinking. Taking up a point made by the noble Lord, Lord Cobbold, legalisation of currently illegal drugs would run counter to the Government's health and education messages as well as to the aims that they seek to achieve by their drug strategy. It would not eliminate the need for prevention, treatment, education, information, advice and harm minimisation—all matters that were raised by the noble Lord, Lord Adebowale, and which have significant and ongoing costs attached to them.
	Legalisation could be expected to attract substantial commercialisation. Legitimate businesses would endeavour to encourage demand for their products in their quest to maximise profit. There would be no reduction in drug-related crime and there would remain an illicit market. So I hope that noble Lords would accept that a regulated market through controlled outlets would not, we would respectfully suggest, eliminate illicit supplies, as alcohol and tobacco smuggling amply demonstrate.
	The Government's reaction in relation to testing is an important addition. It has been suggested, including by the noble Lord, Lord Adebowale, that we should strengthen existing voluntary schemes, such as arrest referral, rather than creating what is referred to as a new criminal offence involving drug testing at arrest, and that we should work towards a national arrest referral service which would be user-focussed and consistently applied across the country, drawing upon best practice.
	I can reassure the noble Lord, Lord Adebowale, and the House that we are strengthening the existing voluntary arrangements by putting in more resources and integrating arrest referrals into drug intervention programmes. Arrest referral is a key gateway into the through care and after care provided by the criminal justice integrated teams. Arrest referral and other drug workers work in partnership with, or increasingly as part of, those teams. The voluntary arrangements are already national as they operate in custody suites throughout England and Wales and are available to all drug misusers following arrest.
	Our current statement of expectations makes clear that the examples of good practice, which I know have been cited by the noble Lord, Lord Adebowale, today and at other times, should be in place to develop nationally along with many other examples in order to engage individuals in treatment most effectively. Therefore, drug testing on arrest is not a new criminal offence. Rather, Clause 7 provides a power to request an arrestee to provide a sample. The arrestee will commit an offence only if he refuses to provide such a sample without good cause. The introduction of testing at an earlier stage in the process, combined with the requirement to attend an initial and possibly follow-up assessment following a positive test, aims to increase the proportion of those testing positive who attend an assessment. This is the key step towards engaging in the treatment and support, which I know the noble Lord recognises as being essential to changing behaviour and sustaining that presumption.
	I hear what the noble Lord says in relation to ASBOs. We understand the interconnection between those issues; the importance of identifying the needs of young people; obtaining for them the help and support to divert them from crime and anti-social behaviour; making sure that there is early intervention in relation to drug treatment; and that the treatment is a more useful tool than incarceration or other forms of intervention, unless the behaviour means that it can be dealt with in no other way.
	I wish that we had a little more time because I want to say a little more about how the changes we have in the criminal justice system have helped the better co-ordination. We have created the national criminal justice boards, the local criminal justice boards and the crime and reduction partnerships, and we are the working together with Connexions, non-governmental organisations and drug treatment teams. All that partnership working means that we have created better integration in dealing with children and young people in particular, but also vulnerable young adults who are so often the victims of drugs and drug misuse.
	These issues are complex and the Bill is a helpful addition to all those other steps. It is not a panacea. I want to reassure the noble Lord, Lord Mancroft, that we do not believe that it will fix all. However it will be a helpful contribution in ensuring that the focus is on the helpful treatment, assistance, advice and intervention for those who are addicted to drugs while maintaining a sufficiently and significantly robust line on those who want to take advantage of vulnerability by peddling what I know all noble Lords believe to be pernicious and soul-destroying drugs which limit the humanity which people are thereby able to express. I commend the Bill to your Lordships.
	On Question, Bill read a second time.

House adjourned at twenty-nine minutes past eight o'clock.
	[The first Written Statement was submitted on Thursday 24 March but was received too late for printing in the Official Report]